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July 13, 2010

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>Texas can be a truly awful place.

We considered moving there, and did a recon mission (sans kids) a few years ago. Generally speaking, people were not wholly rude to us, but many were quite dismissive (rental car folks, hotel folks, UT folks), especially through the lens of this famed "Southern hospitality."

The general mood seemed to be "We're Texas. We're too big to give a @#$ about you."

Gotta say, the family and I actually love it here. I wouldn't head back to NY short of tripling my salary and a c-level slot. The North East sucks. (Also, I'm genetically predisposed to hate snow.)

That said, Noel, this particular case is clearly a travesty. Having had pretty good relations with our own HOA (including sitting on a committee for a while), I would tend to agree with your suspicion that this particular case involves insider dealing.

Overall, I'd say HOAs are most akin to NYC-style Business Improvement Districts (ala Times square Alliance), so they're really more of an additional layer of government below the municipal. Technically, I live in Fort Worth, but the local HOA pays for additional services, etc. Still FW PD, water & garbage collection, though. (We do get an extra local officer, tho.)

I see two possible "philosophical" differences between an HOA and a municipal government:

1) Very often the community in question would never come into being if the HOA weren't put in place first. Usually they are set up on tabula rasa greenfields in order to facilitate the construction of a development while assuring the new buyers that whatever level of amenities, construction, zoning, etc that they require in order to buy will be in place. They usually don't cover the entire area of a given municipality. I think this differs somewhat from most municipal government, which usually comes into being sometime after settlement when the locals determine that things have gotten to wild & woolly and decide to incorporate a township or what have you.

2) HOAs are both smaller and significantly more intrusive than municipal government. They can set up rules that make sense for a very small area but would be nonsensical for an entire municipality. i.e. Fort Worth has a high-rise downtown that requires a very different "operating system" than our stand-alone suburban stronghold. It would also be impossible to rely solely on zoning within the existing municipal structure, which would be dominated numerically in democratic terms by people who do not know who we are and who have a very different set of problems/issues to deal with. This way, we get to apply very local resources to very local problems.

I'd say these point to HOAs as really being a sub-municipal level of quasi-government (or Quango) that by definition requires private aspects given its strong initial reliance on private capital to form the community in the first place.

I can think of a third distinction, though I suspect it relies mostly on perception (or lack thereof.) On buying a place within our HOA, it was very clear at the time of closing what our rights and responsibilities were in regards to the HOA. That is, from day one we have had a document that spells out what they can do if we don't pay dues, what colors we can paint the fences, how many stories are allowed on our house, etc. Not everybody reads these in detail, of course, but in theory they are there and you can tell what the consequences of a given action (or lack of action) can be going in.

Eminent Domain, OTOH, strikes me as being a bit more arbitrary in that the conditions under which your property can be seized are somewhat more vague and somewhat more subject to the vagaries of local democracy. If the voters decide they'd be better off with an office building where your dilapidated house is, well, they can in theory elect officials that will make it happen.

This may only be a difference in perception, of course. As i said, most people don't read the HOA docs in their full detail. The Captain and his wife probably didn't. At the same time, ED takings do have practical limits as far as due process and remuneration.

Bernard, I'm glad you're happy where you are.

I live in California, and while our HOA has improved slightly (mostly due to hiring an outside management company, so the bulk of the administrative work no longer falls to volunteers), we can barely evict anyone. Perhaps that isn't quite the legal terms. In any case, at the meetings the Board generally reveals how many units have defaulted, and then it's just a waiting game to see if the defaulted owners will pay (either their mortgage or their HOA dues, and which would you pay first?) or if the bank will take over in X days, at which point the HOA won't get paid at all.

Marcia,

The only upside I see in the situation you describe is that whomever the bank flips the place to thereafter will probably be in a better position to cover future HOA dues than the former occupants. Still, the burden on those of you that remain has to be large. Is the foreclosure rate particularly bad where you're at? (Relative to CA, of course. SoCal was basically Ground Zero for the bubble implosion.)

Does an HOA have a preexisting lien on the property? How could they put the assessment lien on the property after only a couple of missed payments? Can an HOA block a sale?

Moving from Texas to Florida, isn't there some kind of homestead exemption, where you can't lose your home for nonpayment of taxes; can you still get evicted by your HOA?

Sorry to ask such silly questions, but inquiring minds...

Noel,

I wouldn't get too upest about this. It's shitty, but...

1) They at least committed some sort of fraud and perjury by saying he wasn't overseas, even though he was.

2) There was pretty clearly some self-dealing going on. The house sells for 3k on the courthouse steps, and then gets sold for $140k?

There are a few other problems with what the HOA did, but it isn't quite as evil.

Of interest, I think the attached points in the direction of a couple of the points I made above: http://www.nj.com/mercer/index.ssf/2010/07/one_towns_solution_hopewell_in.html

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